Samsung Asset Management's KODEX US Dividend Dow Jones Target Covered Call Surpasses 100 Billion KRW in Net Assets

Samsung Asset Management announced on the 20th that the KODEX US Dividend Dow Jones Target Covered Call Exchange-Traded Fund (ETF) has surpassed 100 billion KRW in net assets. This milestone was reached six months after its listing at the end of May this year.

The KODEX US Dividend Dow Jones Target Covered Call invests in the same stock portfolio as SCHD (Schwab US Dividend Equity ETF), which is familiar to domestic investors as a dividend growth ETF, while incorporating a covered call strategy to significantly increase monthly dividends. The underlying index is the ‘Dow Jones U.S. Dividend 100 10% Premium Covered Call,’ a target covered call index that flexibly sells S&P 500 call options monthly to pursue an annual premium of around 10%. As a result, it adds about a 10% premium to SCHD’s dividend yield, paying out monthly distributions of approximately 1%.

Accordingly, this product pays the highest monthly dividends among similar products and attracts the most funds from individual investors seeking stable monthly dividends, recording net purchases of 59.7 billion KRW since its listing. In fact, the KODEX US Dividend Dow Jones Target Covered Call has consistently paid stable distributions of 101 KRW or more each month at a market dividend yield of about 1%. Since listing, it has paid dividends totaling 513 KRW over five occasions, naturally leading to steady inflows from individual investors.

Additionally, by utilizing the target covered call strategy that aims for an annual premium of around 10%, it also has the advantage of actively participating in capital gains from portfolio assets. Since only a portion of the assets is used to pursue premiums from selling call options, it allows for participation in capital gains when stock prices rise. Including dividend income, the product’s return over about six months since listing has reached approximately 13.2%.

Han Dong-hoon, manager at Samsung Asset Management, stated, “The KODEX US Dividend Dow Jones Target Covered Call ETF is designed to significantly increase monthly distributions by maintaining SCHD’s identity as a dividend growth ETF while incorporating a target covered call strategy. We will continue to strive to consistently deliver the promised monthly dividend of around 1% and stable capital gains to our investors.”

Meanwhile, Samsung Asset Management also offers various monthly distribution products investing in high-dividend US stocks, such as actively managed covered call strategies like KODEX US Dividend Covered Call Active and monthly distribution types like KODEX US Dividend Dow Jones, in addition to the KODEX US Dividend Dow Jones Target Covered Call.